In Mozambique, less than two months after liquidity crunch and bailout of Moza Banco, the country’s fourth largest bank, the Central Bank of Mozambique has ordered the closure of private bank Nosso Banco for failing to overcome the difficult financial situation in which it was.

The Central Bank said in a statement released on November 13, 2016, that Nosso Banco was poorly capitalized even after its management presented a recovery plan that included injecting cash into the bank and improving its governance.

“The bank has shown that it is unable to overcome the difficult economic and financial situation in which it finds itself,” the bank said in its statement adding however that it has guaranteed the deposits of Nosso Banco’s clients.

Mozambique has been dealing with a severe financial crisis since it was discovered in April 2016 that more than more two billion dollars in loans taken by State firms had been hid from international institutions and not disclosed in official statistics. Since the scandal emerged, the local currency weakened by 84.8% to the dollar from the beginning of the year, Africa’s worst currency performance.

After the shocking revelations, the IMF halted its aid to the nation, followed by the World Bank and its donor-countries.

"The bank has shown that it is unable to overcome the difficult economic and financial situation in which it finds itself," the central bank said in a statement posted on its website.